Wheat shortage puts squeeze on bakers

Kupel’s, the venerable vendor of countless kosher delights, recently raised its bagel prices for the first time in years, knocking the price up to $8 from $6.50 just a few months ago.

Neal Simpson

Forget cheaper by the dozen.

Kupel’s, the venerable vendor of countless kosher delights, recently raised its bagel prices for the first time in years, knocking the price up to $8 from $6.50 just a few months ago.

“Unfortunately, I have no choice,” said owner Farzard Ghorbi, who has seen the cost of flour more than triple in recent months. “Believe me when I tell you we didn’t go all out.”

Wheat products have doubled and tripled in price as farmers devote more land to lucrative corn and soybean crops that can be converted into biofuels. As a result, land once used to feed carb-loving Americans is now being used to fuel next-generation cars.

“We’re in a zero-sum game as far as planted acres,” said Daniel Cooley, a UMass-Amherst professor who studies the business of agriculture. “If you plant more of something, you have to plant less of something else.”

Cooley said other factors, such as diminishing grain imports, have conspired to push wheat prices into the stratosphere in recent months.

Last week, the American Bakers Association, which represents wholesale bread makers who stand to lose millions of dollars, called on lawmakers to pass legislation to address what it calls a “wheat crisis.”

“The wheat supply is at historically low levels, commodity prices are at an all-time high, the dollar is down and the consumer is just starting to feel the impact,” association President Robb MacKie said in a statement.

Miles away from American’s grain belt, the wheat shortage is making life difficult for small-time bakers like Abe Faber, who now pays $24 for a bag of flour that cost him $16 six weeks ago.

“Hopefully our customers will believe us when we say we’re only raising our prices when we have to,” he said.

It’s a conversation that Faber, who owns Clear Flour Bread on Thorndike Street, is having more often as his raised prices 10 percent across the board, something he typically does every two or three years.

Faber said he’s had to go back and look at the cost of all his ingredients to keep his prices reasonable.

“We just try to look at what’s fair,” he said. “You have to be doing your homework, you have to keep your pricing really precise and be on top of it.”

But it’s not just prices Faber’s worried about. He’s also had trouble finding some of the specialty flours, like rye, he uses for the bakery’s artisan breads.

Back at Kupel’s in JFK Crossing, Ghorbi said it’s not just wheat that’s driving his prices up. Everything he buys is getting more expensive: poppy seeds, sesame seeds, eggs.

“And on and on and on,” he said. “It’s just impossible.”

To keep customers at bay, Ghorbi has plastered his store with signs explaining the rising costs of production and promising to “minimize the impact on customers.”

“I hope they see what I’m going through,” he said.

Ghorbi insists he’s done everything he can to keep his prices down. If he passed along all the prices increases he’s seen recently, he estimates his bagels would cost $12 or $14 a dozen.

And except for regular customers, many bagel fans may not notice the price hike. Down the street at the new Panera Bread chain, a baker’s dozen is only 50 cents cheaper: $7.49 to Kupel’s $7.99.

“I didn’t even notice,” said one customer as he stepped of Kupel’s holding a plastic bag bulging with bagels.

John Pergantis, owner of the custom cake shop Party Favors in Coolidge Corner, said he’s avoided raising prices by cutting back in other areas, such as the money he spends on labor. But Pergantis said he’s only able do that because of all the work that goes into making his cakes.

“We have more flexibility, we have more leeway, we have more room to play,” he said.

Pergantis said he’s looking for more places to cut his costs, but with his flour costs tripling in the last two months, he thinks a price increase is “inevitable.”

Meanwhile, at Athan’s European Bakery in Washington Square, owner Aris Athanasopoulos said he’s managed to absorb rising costs with only “very minimal” prices increases for breakfast items such as croissants.

“It’s not easy, you know,” said Athanasopoulos. “We’ll see what happens.”

The worst may be over for bakers, Cooley said. Though he warns that the era of cheap food is over, the professor believes the price of grain will correct itself as high wheat prices make it a more attractive crop for farmers.

“I’m guessing the price of wheat will go down from its high,” he said. “But I don’t think it’ll ever get down to the point where it was, say, two years ago.”

Neal Simpson can be reached at nsimpson@cnc.com.

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